SERVICE MANAGEMENTA QUICK ONCE OVERA QUICK ONCE OVER

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THE SERVICE SOCIETYPART 1

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The Service Society

THE SERVICE SOCIETY

30%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1970 1980 1990 2000 2010

Extraction industries

Goods producingindustries

Service industries

The Service Society1 of 2

WHY ARE WE A SERVICE SOCIETY

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The Service Society2 of 2

SERVICES DOMINANT LOGICPART 2

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Services Dominant Logic

SERVICES AS PROCESSES

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Goods – are a resource – something you get

Services – are a process – activities that happen over time

Services Dominant Logic

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CUSTOMER AS CO-PRODUCER

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Goods – you are not involved in the production process

Services – you may be involved in the production process

Services Dominant Logic

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SIMULTANEITY

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Goods – can be produced, then consumed later

Services – are often produced and consumed at the same time

Services Dominant Logic

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PERISHABILITY

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Services – Cannot be stored – lost opportunities are lost forever

Goods – can be stored – for sale later

Services Dominant Logic

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INTANGIBILITY

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Goods – Are often tangible so can be tried before buying

Services – Intangible services cannot be tried out before buying

Services Dominant Logic

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HETEROGENEITY

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Goods – are focused on things and are alike

Services – are focused on people and vary from customer to customer

Services Dominant Logic

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VALUE IN EXCHANGE V.S. VALUE IN USE

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Goods – Customers exchange for goods and use them how they want

Services – Customer get value from services by using them

Services Dominant Logic

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SERVICE QUALITYPART 3

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Services Quality

WHAT IS SERVICE QUALITY

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Services Quality

Expectation Experienceversu

s

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EXPECTATION V.S. EXPERIENCE

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Services Quality

Expectation

(What I w

anted)E

xperience(W

hat I got)

A B C

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DIMENSIONS OF SERVICES

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Services Quality

Process is Important

Outcome is Important

Both Process and Outcome are Important

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SERVICE QUALITY: EXPECTATIONSPART 4

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Service Quality: Expectations

SOURCES OF EXPECTATIONS

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Service Quality: Expectations

Sales/ Marketing

Information

Corporate Brand & Image

What Other Customers Say

Past Experience with Service

Relationship with Service

ProviderExperiences with Other Services

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Customer Expectations

TYPES OF EXPECTATIONS

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Service Quality: Expectations

Explicit Unrealistic: “make me look like Brad

Pitt”

Fuzzy: “make me look like a rockstar”

Explicit Realistic: “Short back and sides”

Implicit: “why didn’t you ask me first?”

Make

explici

t

Make realistic

Make explicit

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SERVICE QUALITY: EXPERIENCEPART 5

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Service Quality: Experience

THE SERVICE SEQUENCE

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1

23

4

56

7

8 9Expected Service

Above expectation (great service)

Below expectation (poor service)

Zone of Tolerance

Service Quality: Experience

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THE CUSTOMER/PROVIDER RELATIONSHIP: 2

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Relationship

SequenceSequence

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Relationship with a

hotelA stay at a

hotel

Dinner at the hotel

Ordering dessert

Act: Also known as ‘Moments of Truth’

Service Quality: Experience

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THE CUSTOMER/PROVIDER RELATIONSHIP: 2

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Relationship

SequenceSequence

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Relationship

SequenceSequence

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Poor Relationship

Good Relationship

Service Quality: Experience

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QUALITY FACTORS AND MEASURES PART 6

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Quality Factors & Measures

WHAT WE RESPONSIBLE FOR?

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Quality Factors & Measures

The equipment

Actions (& inactions) of staff

The systems

The processesActions of the

customer

Actions of other customers

The expectations

The facilities and environment

This

But not

this

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EXAMPLE: MANAGING CUSTOMERS

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Quality Factors & Measures

We limit their choices

We restrict their movement

We tell them what to do

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TYPES OF QUALITY

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Quality Factors & Measures

Enhancer FactorsSanitary Factors

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MEASURING QUALITY

NPSAsk customers how likely they would be to recommend a service to a friend or colleagueSimpleEasy to get a good response rateCollects limited dataFast to implementRisks becoming a scoreImplied comparison between expectation and experience

ServqualAsk customers what they expected versus what they got for each aspect of a serviceComplexRequires customer effortComes with good dataSlow to implementMaintains focus on service aspectsExplicitly compares expectation against experience 28

Quality Factors & Measures

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SERVICE FAILUREPART 7

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Service Failure

WHAT IS SERVICE FAILURE

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Service Failure

Expectation

(What I w

anted)E

xperience(W

hat I got)

A B C

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PROMISES MODEL

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Service Failure

Delivery Customers

Marketing/ Sales

Making Prom

isesEn

ablin

g Pr

omise

s

Delivering Promises

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GAPS IN PROMISES LEAD TO SERVICE FAILURE

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Service Failure

Keeping Promises

Making

Promises

“This is pest control, how may I help

you?”3 of 3

SERVICE RECOVERYPART 8

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Service Recovery

ARE COMPLAINTS GOOD?

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Service Recovery

Prevents bad word of mouth

Lets provider respond to issues

The alternative is customers leaving

Make issues visible

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YES NO

WHAT ARE CUSTOMERS LOOKING FOR?

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Service Recovery

Procedural

Interactional

Distributive

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The Three Justices

SERVICE GUARANTEESPART 9

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Service Guarantees

SERVICE GUARANTEES

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Service Guarantees

If a customer can’t try before they buy, you can still reduce the risk to the customer to make the service more attractive

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SERVICE PRODUCTIVITYPART 10

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Services Productivity

PRODUCTIVITY

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Services Productivity

Internal: Cost to provide a service instance to a customer. How much does it cost to provide the service.

External: Cost to provide a level of service experience a customer. How much does it cost to make the customer like the service?

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WORKED EXAMPLE

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Services Productivity

Internal Productivity: Cost to produce a DVD

External Productivity: The cost to make it something that people will recommend or come back to

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WASTEPART 11

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Waste

WASTE IN SERVICES

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Services – Customers are ‘stored’ when there is too little capacity

Goods – Inventory is a buffer between production and demand

Waste

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MANAGING QUEUES

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Services – Manage Demand (yield management)

Goods – Manage Waiting (make it more bearable)

Waste

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SELF SERVICE AND AUTOMATIONPART 12

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Self Service & Automation

SERVICE PROCESS MATRIX

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Degree of Specialisation/Customisation

Low High

Degree of C

ustomer C

ontact

Low Car wash Pest control

High

School Physician

Easy to automate

Hard to automate

Self Service & Automation

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SERVICE CULTUREPART 13

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Services Culture

SERVICE CULTURE

Shared Values (values, beliefs, behaviours, paradigm) Leadership Training Empowerment/Rules Trust Roles and Responsibilities

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Services Culture

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STUFF THAT GOT LEFT OUT

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Hybrid~Goods~and~ServicesHidden~ServicesServicescapeInseparability~of~CustomersExplicit~vs~Implicit~ServicesNew~Service~DevelopmentService~DesignService~Quality~by~DesignApproaches~to~Service~RecoveryService~ImprovementManaging~Capacity~and~DemandYield~ManagementQueuing~ModelsThe~Psychology~of~Waiting~Supply~Chain~ManagementRelationship~QualityCustomer/Supplier~BondsQuality~Gap~AnalysisCost~of~QualityCustomer~SacrificeSelf~Service~AttractorsService~Guarantee~RequirementsOpportunistic~ClaimsSqueaky~WheelService~Recovery~SequenceService~Recovery~ParadoxPsychological~Impact~of~Service~FailureTypes~of~Service~Guarantees